KENNER, La., Feb. 5, 2014 (GLOBE NEWSWIRE) -- Stephen Schloegel has spent 35 years in the automotive repair industry. And it's a good thing, because otherwise, maintaining his hobby as a race car driver could get expensive.
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In 2009, he began leasing a garage in Kenner, Louisiana, to house his hobby. "Working on my friends' race cars pretty much covered my lease payment," he said. But after a few years, Mr. Schloegel's hobby was keeping him so busy that he had to make a tough choice.
"I had to make the decision to back out of this, or quit my job," he said. "I always wanted to go into business for myself. I told myself if I want to do it, now would be the time. My wife and I had saved enough money to ensure we would be okay if I made the leap."
So he did. Mr. Schloegel registered his business and opened his own shop – D & S Automotive Specialist – inside the garage he'd been leasing. He continued leasing the building for a few months before he learned that the owner of the building had a potential buyer. Mr. Schloegel was faced with yet another tough decision – find a new location for his new business or buy the shop himself.
"D & S was only six months old. I didn't think anyone would give me a loan," Mr. Schloegel said.
A family member suggested he talk to a lender at Bank of New Orleans. Mr. Schloegel qualified for a small business loan from Bank of New Orleans, which was funded by a low-cost Economic Development Program (EDP) advance from the Federal Home Loan Bank of Dallas (FHLB Dallas), and was accompanied by a $10,500 EDPPlus grant from FHLB Dallas to help with working capital.
EDPPlus grants are noncompetitive and available on a first-come, first-served basis to promote and enhance small business development and job creation. In 2014, FHLB Dallas has made available through members $1 million in EDPPlus grants.
Bank of New Orleans has been using the EDP and EDPPlus programs for several years.
"The EDPPlus is a great tool for small businesses like D & S," said Floyd Smith, assistant vice president and commercial loan portfolio manager at Bank of New Orleans. "We're a real estate lender so we're focused on helping our customers buy or refinance a building. The grant is a good way for small businesses to purchase equipment or to fund inventory, which is not part of our commercial lending program."
Mr. Smith said Mr. Schloegel's experience in the automotive industry made him an ideal candidate for the program.
"The borrower has been in the automotive business for years working for other employers," Mr. Smith said. "This was a chance for him to start his own business and hopefully create other jobs."
Mr. Schloegel initially didn't give the possibility of receiving an EDPPlus grant much thought.
"I've never had anything like that before and I had so much going on with trying to get my loan and business plan approved that I wasn't too concerned about the grant at the time," Mr. Schloegel said. "Once I was approved, though, the grant was a big relief."
In February 2013, a year after officially opening D&S Automotive Specialist, Mr. Schloegel purchased his building. He used his small business loan toward the purchase, and he used the EDPPlus grant for working capital.
Mr. Schloegel is the full-time mechanic at the shop. Since taking over the building Mr. Schloegel has made a number of improvements, including building out the office, installing new flooring, replacing the roof, and upgrading the electrical wiring. He has also purchased tools, office equipment, and furniture. Mr. Schloegel's wife, Donna, has a full-time job, but helps out at the shop with bookkeeping.
Business has been steady. In fact, adding another mechanic is in Mr. Schloegel's future plans. And while he admits starting his own business has been stressful, "It's rewarding at the end of the day because you are doing it for yourself," he said. "I stay busy. I give everybody good deals and I don't charge crazy prices. All my customers are repeat customers and they send me their mothers, brothers, sisters, cousins, and friends."
About the Federal Home Loan Bank of Dallas
The Federal Home Loan Bank of Dallas is one of 12 district banks in the FHLBank System created by Congress in 1932. FHLB Dallas, with total assets of $31.3 billion as of September 30, 2013, is a member-owned cooperative that supports housing and community development by providing competitively priced loans and other credit products to approximately 900 members and associated institutions in Arkansas, Louisiana, Mississippi, New Mexico, and Texas. For more information, visit the FHLB Dallas website at fhlb.com.
The photo is also available via AP PhotoExpress.
